There is no need to introduce new tax in this current economic situation – Government told

The Executive Director for Revenue Mobilisation Africa and a tax expert, Geoffrey Ocansey has said that there is no need for the government to introduce any new tax in this current economic situation but rather focus on the existing ones and strategize its mobilization.

Mr. Ocansey in an interview on Plan B FM’s morning show NKOSUONSEM with Obidehye Kofi Sekyi said, the citizens are feeling the negative impact of the IMF conditionalities, and introducing additional two taxes Emission tax and 15% VAT on electricity will worsen the plight of Ghanaians and since the World Health Organization WHO and the president have said that covid-19 is no more, the people think the covid levy should be abolished and give them some relief.

Meanwhile, former Finance Minister, Seth Terkper, has stated that the current tax regime in Ghana is the most severe and punitive in the nation’s history.

The opposition National Democratic Congress has accused the New Patriotic Party government of introducing over 50 new taxes since 2017.

The continuous imposition of taxes has sparked public outrage in Ghana. The most recent taxes slapped on Ghanaians are the Value Added Tax (VAT) on residential electricity usage and the Emissions levy.

Mr. Terkper insisted that the country’s current tax rates are excessively high.

He explained that such high rates could potentially drive individuals to seek ways to evade these taxes.

“I think we are seeing the worst of the tax system… It is the most punitive and worst tax structure that we have had. And as with every punitive tax will end up not collecting, or generating as much revenue as possible,” he said.

He further underscored that “But more importantly, when you begin to introduce punitive taxes, taxpayers find ways and means of evading and avoiding the tax. So if you have a simplified tax regime it is better and compliance increases. And the evidence is that if you look at our tax-to-GDP ratio well until recently as GRA is claiming, the highest point at which revenue was collected was 2015 per the percentage of GDP, not nominal terms.”